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France PMI March 2024

France: France services PMI shows mixed signals in March

The HCOB France Services Purchasing Managers’ Index (PMI) dropped to 48.3 in March from 48.4 in February. As a result, the index moved further below the 50.0 no-change threshold, and signaled a slightly faster deterioration in services sector operating conditions compared to the previous month.

The reading was influenced by ongoing economic weakness and inflation, which continued to suppress business activity in March. Moreover, sales to non-domestic clients presented a challenge, with new export business declining at the fastest rate in three months. That said, employment in the sector expanded, marking the fastest pace of job creation in five months, driven by firms’ hopes of stronger activity ahead.

In terms of prices, input cost pressures, though slightly reduced, remained high by historical standards, with reports of increased salary and energy costs. Meanwhile, the rate of output charge inflation saw little change, with selling price hikes remaining strong and broadly consistent with those observed in February. Lastly, business confidence surged to a 20-month high, driven by hopes of a recovery in 2024.

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